SAN FRANCISCO--(BUSINESS WIRE)--Agriculture technology, along with the global venture capital market, experienced a pullback in investment in 2016.
AgFunder, the leading agriculture-focused online investment platform, released its AgTech Investing Report 2016, providing a comprehensive analysis of investment in the agriculture technology sector. The year was full of contrasts. While global VC investment fell 10%, total investment in agtech fell to $3.2 billion - a 30% drop from 2015, but well ahead of 2014. Interestingly, global VC deal activity declined 24%, but it was agtech’s busiest year to date with a 10% increase in the number of deals closed year-over-year.
A record-breaking 2015 for both global VC and agtech investment prompted the pullback in 2016 as investors became more cautious. Notably, Q4 – usually the most active quarter – saw a precipitous drop in both agtech & global VC. Analysts attribute the contraction to investors’ renewed focus on profitability and execution in the wake of some underperforming portfolio companies, lackluster IPOs early in the year and down rounds. Together with political uncertainty in the US and Europe, this pullback was felt in global VC and agtech. Agtech specific investors continued to invest, but there was caution from outside investors, and many struggled with startup valuations getting ahead of revenues and traction.
- Total investment dollars declined 30%, driven by a cooling off in investor interest in drones, food delivery, and bioenergy and the absence of some large financings that happened in 2015.
- Investment grew year-over-year in four of nine categories: Ag Biotechnology (150% to $719m), Farm Management Software, Sensing & IoT (3.7% to $363m), Novel Farming Systems (63% to $257m), and Supply Chain Technologies (3% to $180m).
- Deal flow climbed to 580, up 10% year-over-year.
- Seed stage deals accounted for 57% of activity reflecting the growing number of early stage resources for agtech entrepreneurs, such as accelerators and incubators.
- US startups accounted for 48% of dealflow during 2016, down from 58% in 2015 and 90% in 2014. Startups in Asia drove the increase in funding to non-US agtech startups.
For a detailed analysis, read our AgTech Investing Report 2016: https://agfunder.com/research/agtech-investing-report-2016.
AgFunder is an online investment platform for agriculture and agtech opportunities. We allow accredited investors to invest in developing technologies transforming the agriculture industry. Visit http://agfunder.com.